Aviation stocks give markets a lift with US at record levels

Ryanair and IAG enjoy strong starts to new year but Tullow Oil slides almost 7%

European markets gained new year altitude on strong performances by aviation stocks and news that China would stimulate its economy. Irish-founded Tullow Oil, however, began 2020 on a low after finding less oil than expected in drilling in a key well.


The new year's first day of trade was mostly a good one for Irish-listed stocks. Ryanair closed 1.91 per cent up at €14.91. Dealers said that analyst predictions of a good 2020 for air travel, and news that Boeing would compensate Turkish Airlines for aircraft delivery delays, boosted carriers around Europe.

Housebuilder Cairn Homes rose 1.59 per cent to €1.28 while rival Glenveagh Properties added 1.37 per cent to 88.5 cent.


AIB closed 3.54 per cent ahead at €3.216 and Bank of Ireland gained 2.72 per cent to €5.015. Traders said there no particular reasons for either performance and pointed out that the Irish banks remained volatile.

Building materials giant and index heavyweight, CRH, advanced 2.33 per cent to €36.50. Paddy Power and Betfair owner, Flutter Entertainment rose 2.35 per cent to €110.9.


Tullow Oil slid almost 7 per cent after drilling it its Carapa-1 well off Guyana, where its partners are Repsol and Total, found less oil than the company had hoped. Its shares tumbled as much as 20 per cent following the news but recovered to close 6.78 per cent down at 59.66p sterling in London, where the Irish-founded group has its premier listing.

Tullow said net pay, that is the thickness of the actual oil deposit, was four metres. This was less than pre-drill estimates, but chief operating officer Mark MacFarlane maintained that it showed a nearby lucrative oil discovery extended into Tullow’s licence area.

Aer Lingus, British Airways and Iberia owner, International Consolidated Airlines' Group (IAG), climbed 1.79 per cent to 636.2p, reflecting the industry's popularity with buyers on Thursday.

Persimmon rose 1.3 per cent to 2,730 on what was also a good day for British builders, whose shares have suffered as investors tried to grapple with Brexit uncertainty. Taylor Wimpey added 1.86 per cent to close at 197.

The same sentiment buoyed Irish builders' merchant, Grafton, whose shares gained 3.63 per cent to 898.5p. Best known here as the owner of the Woodie's DIY chain, Grafton has a large British business while its stock trades only in London.


Air France KLM rose 3.28 per cent to €10.25 while German carrier Lufthansa added 1.65 per cent to €16.68. In a related industry, Airbus rose 2.33 per cent to €133.52 as it edged out US giant Boeing to become the world's biggest aircraft manufacturer.

That lifted the wider French index 1.1 per cent. Bank-heavy Spanish and Italian indices gained the most, up around 1.4 per cent, while German shares posted their best day in one month, shrugging off figures that showed the manufacturing sector contracted further in December.

Euro zone stocks jumped 1.2 per cent on Thursday despite latest data showing factory activity in the bloc contracting for the 11th straight month.


US stocks extended their rally into the new year, with all three major indices hitting record highs on Thursday, as fresh stimulus from Beijing to prop up its economy added to optimism fuelled by easing trade tensions and an improving global outlook.

China’s central bank said on Wednesday it would cut the amount of cash that all banks must hold as reserves, the eighth such cut since early 2018, injecting fresh stimulus into the economy, while also boosting global markets.

The tech sector was the biggest gainer among the 11 major S&P sectors, with Apple and Microsoft, which both have their European HQs in the Republic, providing the biggest boost.

Traditionally defensive groups such as utilities, real estate and consumer staples fell between 0.5 per cent and 1 per cent.

Among individual decliners, Hanesbrands slipped 1.4 per cent after a report that Wells Fargo has downgraded the clothing company's shares to "underweight". – Additional reporting: Reuters

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas